SBIR/STTR REAUTHORIZATION MOVES FORWARD IN HOUSE AND SENATE Created by on 04/08/2011

Both chambers of Congress have taken critical steps over the last few weeks in their ongoing attempt to pass a long-overdue renewal of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs before the current temporary authorization expires on May 31st. The Senate has spent the last three weeks debatingS 493, an eight year SBIR/STTR reauthorization bill authored by Small Business Committee Chairwoman Mary Landrieu (D-LA), Ranking Member Olympia Snowe (R-ME), and Senators John Kerry (D-MA), Scott Brown (R-MA), Jeanne Shaheen (D-NH), Kelly Ayotte (R-NH), Ben Cardin (D-MD), Mark Pryor (D-AR), and Carl Levin (D-MI). As this update went to press, the Senate had not yet taken a final vote on S 493. The bill is similar to legislation that passed the Senate in December 2010 and includes a proposal to increase the “set-aside” to 3.5 percent.

Under the current SBIR program, 11 federal agencies that provide more than $100 billion annually in extramural grants, including the National Institutes of Health (NIH), the National Science Foundation (NSF), the Department of Energy, and the U.S. Department of Agriculture, must devote a minimum of 2.5 percent of their budgets to research funding for small businesses. Since 2009, FASEB has led a coalition of nearly 100 groups from the university community, higher education associations, and patient advocacy organizations against proposed increases to the SBIR “set-aside,” arguing that it would redirect as much as $1 billion to a single research program at the expense of other national scientific priorities. In addition, raising the “set-aside” percentage would further erode NIH’s capacity to fund competitive investigator-initiated grants.

Two House committees have also begun discussions on the reauthorization of the SBIR/STTR programs. On March 16th, the House Small Business committee held a hearing entitled, "Spurring Innovation and Job Creation: The SBIR Program”, the first in a series of meetings under new Chairman Sam Graves (R-MO) aimed at fully examining the SBIR program before introducing reauthorizing legislation. The witness list included the president of a small business that had received an SBIR grant from NSF, a member of the National Academy of Sciences committee that is assessing and evaluating the impact of the SBIR program, a representative from the Small Business Technology Council, and the Chief Executive Officer of the Parkinson’s Action Network, who testified about the importance of the SBIR program at NIH. All of the witnesses stated that both SBIR and STTR needed to be renewed as quickly as possible in order to provide stability for the program. Most of the hearing was dominated by a discussion of the merits of allowing those small businesses that are majority owned by venture capital companies to participate in the SBIR program. The only witness who mentioned increasing the “set-aside” was from the Small Business Technology Council, which has endorsed S 493. Chairman Graves concluded the hearing by saying “we’re going to work hard to get a bill out and to the House floor in May and ultimately as quick as we can to the President's desk so he can hopefully sign it."

Two weeks later the House Science Committee Subcommittee on Technology and Innovation held a related hearing to examine the role of the SBIR and STTR programs in promoting innovation. The hearing focused on the success of both programs in creating jobs and discussed the need to continue ongoing evaluation efforts to ensure that the federal government is getting the greatest return for its investment. Dr. Sally Rocky, Deputy Director for Extramural Research at NIH testified and stated that the agency does not support increasing the current “set-aside.” Mark Crowell, Executive Director and Associate Vice President for Innovation Partnerships and Commercialization at the University of Virginia also urged the committee not to increase the “set-aside.”

On April 7th, the Small Business Committee Subcommittee on Healthcare and Technology met to discuss draft legislation to reauthorize the SBIR and STTR programs for three years. Witnesses from small businesses in Missouri and Texas, the University of North Carolina at Greensboro, and the Biotechnology Industry Organization testified in support of proposals that would modernize the SBIR program and offered additional suggestions about how to improve the draft bill. Subcommittee Chairwoman Renee Ellmers (R-NC) noted that the proposed legislation would ensure efficient use of taxpayer dollars by targeting the best science and continuing the “set-aside” at 2.5 percent. She also stated that there is a very strong case for reauthorizing the SBIR and STTR programs because of their proven track record in advancing innovative science and creating jobs.